Dinner was nearly wrecked last night [Nov 5th 2009]. I set off to get an essential missing ingredient from The Bottle Shop in downtown Woodford. Shock horror. Traffic was at a complete standstill. In Woodford. At eight o clock in the evening. Unprecedented

What had happened was a community firework display which had brought families out in numbers that had exceeded expectations. Our one main road could not take the sheer weight of traffic. Eventually I did a Uie and returned home much later with requisite provisions.

Grumpy Old Rant

So why was I cursing Guy Fawkes for wrecking my dinner? In defence of my aging childishness, here’s the explanation. The firework display was, as most readers will have guessed, to celebrate the foiling of the plot to blow up Parliament by that national hero villain Guy Fawkes, many years ago. No Guy Fawkes, no fireworks in Woodford. Simples. It’s all that guy’s fault.

A more rational explanation

But there is a less petulant thought emerging from this grumpy old rant. I set off noting to my surprise that there was far less evidence of individual little celebrations. No fireworks going off, lighting the sky from streets and gardens. Why was that? It seemed the unexpected quiet had been noted from Waikiti to Woodford. Yes, half a globe away New Zealand had reported the quietest Guy Fawkes night in years.

The obvious idea is that there just isn’t as much money around to spend on fireworks. But that alone doesn’t quite stack up. When times are tough there is often a special effort to hold on to a much-loved ritual (let’s see what happens to incidence of drunk-driving accidents over Christmas). The other idea is that Halloween is replacing bonfire night as a marketing opportunity in the UK anyway. That may have been strengthened by public awareness that being tricked or treated is a lot less dangerous and disruptive that having half the nation’s young people tooled up and ready to let off improvised explosive devices where they cause the most inconvenience. Parents, shop-keepers, marketing executives find common cause in the switch.

So there we have it. A neat economic explanation of why there were people other than Guy Fawkes contributing to my delayed dinner.

The Morning After

Some things don’t change. The morning after Guy Fawkes night is usually foggy and damp. It was fog as usual in Woodford, as the photograph shows.

The much-anticipated news of the departure of Chuck Prince at Citigroup broke on the eve of Guy Fawkes Day [November the 5th]. In England, it’s the day when Guy Fawkes is burned in effigy on bonfires around the land. It seems to be a time around the world when leaders are sacrificed as punishment for their misdeeds. Is this any more than a modern version of the old symbolic way of placing all guilt on a scapegoat?

The board of Citigroup paid tribute to Mr Prince, with Alain Belda saying: “We thank Chuck for his unwavering commitment to Citi, its employees and its shareholders.”

In days of yore, the priestly caste prepared the leader for the ceremony of ultimate sacrifice. The leader was treated with the greatest of respect, dressed in sumptuous garments, and then dispatched with honor, thus appeasing the Gods, and saving the rest of the tribe from divine wrath.

“It is my judgment that given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as Chief Executive Officer is to step down,”

He had to go, didn’t he?

The much-anticipated news of the departure of Chuck Prince broke on the eve of Guy Fawkes Day. The question was raised by the interviewer in first discussion I heard on the topic. He had to go, didn’t he? Of course, re-assured the financial expert. Citygroup has such massive losses. It has seriously under-performed. He had to go.

Citigroup has installed former Treasury secretary Robert Rubin as chairman after the widely anticipated resignation of Charles Prince, the embattled chairman and chief executive who faced mounting criticism in the wake of a $6.5 billion write-down for the third quarter. After an emergency board meeting Sunday, Citigroup, citing significant declines in the value of subprime-related securities in the past month, estimated that it would take additional write-downs of $8 billion to $11 billion. Yes, he had to go.

To survive the competitive business world, many Japanese companies have now embarked upon restructuring. It is those middle-age men, who contributed to the economic success of Japan since the Second World War, who are now, ironically, the target for restructuring. They have devoted almost all of their lives and often sacrificed their own family life for their companies. People have had the aisha-seisin (a deep spiritual attachment to their own company) exactly akin to that held by the samurai for the oie. The man who commited hara-kiri had trusted the company and believed that the company would not abandon the business warriors. He killed himself when he felt betrayed by the company.

But was this the same kind of ritualistic act that characterized the behavior of a discredited Japanese leader who accepted suicide, as atonement of his disgrace? Or was it more the consequence of the economic realities of modern organizations?

In our recent Western examples, the leaders are hardly treated with dishonor if we judge only the scale of remuneration involved, if the leader had failed in a contractual way. However, even within a strictly rational economic explanation, it is not difficult to see how contractually, a leader of a large organization would have negotiated a lucrative n exit, even if his performance had failed to meet targetrs and expectations.

We should look a little more deeply. It seems that Citigroup wants to reassure markets that it has no intention of changing its business model. That suggests we are operating more on the ancient symbolic model. An honorable resignation, with those sumptuous trappings to the departing leader, protects the others from disaster, and ‘rescues’ the rest of the tribe.

The real test will be whether the departure of the leader produces necessary structural changes, or seeks to avoid them.